INDIANAPOLIS -- It's generally big-banking executives who take the tongue lashings from the mainstream media over how much they're making in salaries and bonuses since the banking collapse of 2008, but a closer look at the nation's top earners in 2009 shows the big winners were credit-card-company executives.
Yes, topping the New York Times list of the highest-paid financial executives is John G. Stumpf, head of Wells Fargo, San Francisco. According to an analysis of 2009 compensation in the industry, Stumpf was paid a personal best of $18.7 million in cash and [image-nocss] stock for 2009up 64% from 2007, just before the financial crisis struck.
And Jamie Dimon, JPMorgan's chairman and chief executive, appears to be the second-highest-paid banker, at $17.6 million, according to the newspaper report, while one of his subordinates collected nearly as much: Ina R. Drew, JPMorgan's chief investment officer.
After that, however, leaders in the pay sweepstakes include the heads of credit-card giants Visa, Mastercard Worldwide, Capital One Financial and American Express.
Joseph W. Saunders, who runs Visa, was paid about $15.5 million, a figure that vastly eclipses the compensation for top executives at Bank of America and Citigroup, according to the report. Ajay Banga, the president of MasterCard Worldwide, was paid about $13 million.
"I commend the New York Times for highlighting the incredible bonuses being doled out to the executives of the big three credit-card companies and their issuing banks," said Robert Johnson, president of Consumers for Competitive Choice (C4CC), in response to the newspaper story titled, "Wall St.'s Biggest Bonuses Go To Not So Big Names." "While credit-card CEOs collect million-dollar bonuses, Main Street retailers across the country face skyrocketing credit-card swipe fees and struggle just to keep the lights on.
"Credit-card companies and big banks collected $45 billion in revenue from merchants resulting from interchange swipe' fees last year alone. Studies have shown that only 13% of interchange fees are actually needed to cover the cost of processing the transaction, while 35% of the fee goes toward profits. I hope that by continuing to draw attention to this critical issue, Congress will take swift and appropriate action and immediately address swipe fees. Small businesses and consumers have been paying for credit-card company greed for far too long."
Why the general change of who is making the most money? Since the bailout, the rules of banker pay are bending. Some of the industry's biggest names are being paid less than relative unknowns. Chief executives, who are usually at the top of the pay heap, are taking home roughly the same amounts as executives who work for themand sometimes less, according to the newspaper article.
Consumers for Competitive Choice, Indianapolis, heads up the Credit Card Con project aimed at reducing interchange fees for credit cards.
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